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Born in Pocahontas, Arkansas, Arnn received his B.A. (1974) in Political Science and Accounting from Arkansas State University. He earned graduate degrees in Government from Claremont Graduate School — an M.A. in 1976 and a Ph.D. in 1985. Arnn studied in England from 1977 to 1980, at the London School of Economics studying International History and then at Worcester College, Oxford University in Modern History. While in England, he worked as Director of Research for Martin Gilbert, the official biographer of Winston Churchill.
In 1980, Arnn become an editor for Public Research, Syndicated in the United States. He was one of four founders of the Claremont Institute in Claremont, California, and served as its president from 1985 to 2000. In 2000, he was named the twelfth president of Hillsdale College. In this capacity, he set the ambitious goal of $400 million for the college's Founders Campaign, beginning in 2001, and under his watch, several new buildings have arisen on the campus.
Arnn also sits on the boards of directors of the Henry Salvatori Center for the Study of Individual Freedom in the Modern World at Claremont McKenna College, the Center for Individual Rights, and the Claremont Institute. He is a member of the Mont Pelerin Society, the Churchill Centre, and the Philanthropy Roundtable.
In 2013 Larry Arnn was criticized for his remarks about ethnic minorities when he testified before the Michigan State Legislature. In testimony against the Common Core curriculum standards, in which Arnn expressed concern about government interference with educational institutions, he recalled that shortly after he assumed the presidency at Hillsdale he received a letter from the state Department of Education that said his college "violated the standards for diversity," adding, "because we didn't have enough dark ones, I guess, is what they meant." After being criticized for calling minorities "dark ones", he explained that he was referring to "dark faces", saying: "The State of Michigan sent a group of people down to my campus, with clipboards ... to look at the colors of people’s faces and write down what they saw. We don’t keep records of that information. What were they looking for besides dark ones?" Michigan House Democratic Leader Tim Greimel condemned Arnn for his comments, which he called "offensive" and "inflammatory and bigoted", and asked for an apology. The College issued a statement apologizing for Arnn's remark, while reiterating Arnn's concern about "state sponsored racism" in the form of affirmative action policies.